Questions

1.Explain the following terms as used in commerce4mks

i)Registered capital

ii)Subscribed capital

iii)Issued capital

iv)Paid up capital

2.Outline any four circumstances under which a credit note may be used.4mks

3.The main objective of commerce is profit maximization.Highlight any four ways in

which businesses can achieve this objective.4mks

4.Give any four functions of commercial attaches.4mks

5.Mention four investment services offered by the Kenya Postal Corporation.4mks

6.Give any four reasons that may lead to dishonour of a cheque.4mks

7.Highlight any four benefits that accrue to a seller who uses personal selling as a method

of sales promotion.4mks

8.Give any four categories of goods that are suitable for direct distribution from producers

to retailers.4mks

9.Highlight four ways in which Insurance companies make profits.4mks

10.State any four sources of capital to co-operative societies.4mks

11.The following balances relates to a business for the year ended 31^st Dec 2000.

Capital as at 31^st Dec 2000170,000

Drawings for the year5,000

Net profit for the year5,000

Extra capital introduced52,000

Purchases20,000

i)Determine the amount of capital as at 1^st Jan 2001.3mks

ii)Calculate the Net profit ratio3mks

12.Outline any four features of a fixed deposit account.4mks

13.Give any four reasons why most business people prefer to transport their finished

products via road transport.4mks

14.Give any four benefits that you may reap as a consumer from an advertising campaign.4mks

15.Mention any four remittance services offered by the post office.4mks

16.Give four reasons why an office may prefer storing information in micro-films instead

of files 4mks

17.Assume that you want to start photocopying business in your nearest town.Cite any

four factors you would consider before buying your copies.4mks

18.The following machines are found in a mailroom.State the function of each.5mks

Functions

Addressing machine

Shredding machine

Guillotine

Franking machine

Composite machine

19.Give any four reasons why the use of Electronic mail (E-mail has become very popular

in Kenya today.4mks

20.The following balances were extracted from the books of MM traders on 31^st January 2002.

ItemAmount

Sales10,000

Purchases6,000

Bank loan2,000

Buildings30,000

Machinery40,000

Premises60,000

Debtors 5,000

Creditors4,000

Opening Stock 7,000

Capital 132,000

You are required to prepare trial balance for MM traders as at 31^st January 2002 from

the above information.6mks

21.Outline any four functions of money as a medium of exchange.4mks

22.Give any four reasons why the government would need to train businessmen.4mks

23.Identify three reasons that can lead to dissolution of partnership.3mks